The number of first-time buyers increasingly taking on higher levels of mortgage debt to enter the housing market has risen substantially, according to recent data. From 2024 to last year, the number of first-time buyers obtaining mortgages with a loan-to-income (LTI) ratio of 4.5 times their salary or higher surged by 66 percent, from 27,500 to 45,800.
The figures, compiled by the money app Plum through a Freedom of Information request to the Financial Conduct Authority, also show a tenfold increase in mortgages with LTI ratios of 5.5 times salary or above, climbing from 420 in 2024 to 4,628 last year.
Lenders calculate an LTI ratio to determine mortgage offers based on a borrower's annual income. A higher LTI typically means a higher interest rate on the mortgage compared to offering a larger deposit or borrowing a lower multiple of one's salary. While lenders commonly offer up to 4.5 to 5 times income, a growing number are now permitting buyers to borrow more, provided they can demonstrate the ability to meet monthly repayments.
Some lenders are offering higher multiples to eligible borrowers. Coventry Building Society, for instance, recently increased its LTI ratio for eligible borrowers to 6.5 times salary. This allows a single applicant earning the average salary to potentially borrow up to £255,190, sufficient for the average first-time buyer property in England priced at £245,450, with a 5 percent deposit. This particular deal requires a minimum annual income of £30,000 for a single applicant or £50,000 for a couple and is not available to self-employed individuals.
Other lenders offer similar or higher LTI ratios, such as seven times salary, but often require larger deposits of at least 15 percent. April Mortgages, for example, allows borrowing up to seven times salary for those earning a minimum of £50,000, with a 15 percent deposit and a minimum ten-year fixed rate. Tipton Building Society offers up to 6.5 times income, but requires a 20 percent deposit or more, assessing applicants based on individual circumstances rather than strict minimum income requirements. Nationwide's Helping Hand mortgage lends six times income with a 5 percent deposit and a five-year fixed rate, requiring a minimum annual income of £30,000 for single applicants or £50,000 for joint applicants. NatWest offers 6.5 times income loans for high earners (above £150,000) with a 25 percent deposit, while HSBC provides a similar offering only to its Premier bank account customers who meet higher income or savings thresholds.
Historically, mortgage lending practices became more conservative after the 2008 global financial crisis. In 2014, a recommendation was made to limit mortgage borrowing to 3.5 times annual income, and regulations technically capped the proportion of new mortgages exceeding 4.5 times LTI at 15 percent. However, significant house price growth coupled with stagnant wage increases has made higher borrowing or larger deposits the primary options for many.
In July 2025, the Prudential Regulation Authority began reviewing LTI restrictions, and the rules have since been relaxed. Mortgage providers are no longer required to limit high LTI mortgage products to 15 percent of their mortgage book. This shift has contributed to the increased availability of mortgages at higher LTI ratios, though borrowers still need a good income and credit score.
Overall, the total number of first-time buyer loans rose by 16 percent last year to 380,716. Loans based on single incomes increased by 17 percent, while joint income loans rose by 16 percent.
Experts caution that the ability for buyers to take on more debt could lead to financial strain if circumstances change, such as job loss or increased living costs. Personal finance expert Rajan Lakhani suggests strategies like building a deposit through a Lifetime ISA to mitigate debt and interest rate exposure. Mortgage technical expert Nicholas Mendes noted that while the tenfold increase in mortgages at 5.5 times income or above is notable, these loans still represent a small portion of the market. He emphasized that lenders are still obligated to assess affordability rather than solely relying on income multiples, but warned that high income multiples combined with small deposits leave borrowers with less financial headroom.